Question: The expected return on Big Time Toys is 11% and its standard deviation is 21.4%. The expected return on Chemical Industries is 8% and its

The expected return on Big Time Toys is 11% and its standard deviation is 21.4%. The expected return on Chemical Industries is 8% and its standard deviation is 27.1%. a. Suppose the correlation coefficient for the two stocks' returns is 0.27. What are the expected return and standard deviation of a portfolio with 50% invested in Big Time Toys and the rest in Chemical Industries? (Round your answers to 2 decimal places.) Portfolio's expected return % Portfolio's standard deviation b. If the correlation coefficient is 0.77, recalculate the portfolio expected return and standard deviation, assuming the portfolio weights are unchanged. (Round your answers to 2 decimal places.) Portfolio's expected return Portfolio's standard deviation % c. Why is there a slight difference between the results, when the correlation coefficient was 0.27 and when it was 0.77? Click to select)

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